Taxes on long-haul flights to go up despite airlines' pleas for suspension

Charles Hymas
·3-min read
The Office for Budget Responsibility has predicted that air travel is unlikely to return to a post-Covid 'new normal' until 2024-25 - Kate Green/Anadolu Agency via Getty Images
The Office for Budget Responsibility has predicted that air travel is unlikely to return to a post-Covid 'new normal' until 2024-25 - Kate Green/Anadolu Agency via Getty Images

Taxes on long-haul flights are to rise and remain the highest in Europe despite crisis-hit airlines calling for them to be suspended to help rescue summer holidays.

Air passenger duty (APD) rates for departures from Britain will increase by £2 to £82 for a traveller with an economy ticket, and by £5 to £181 for those in premium, business and first class. The change, revealed in Treasury documents accompanying Rishi Sunak's Budget, is in line with the RPI measure of inflation.

Taxes on short-haul flights to destinations including European holiday hotspots will remain frozen at £13 for an economy ticket and £26 for those in premium, business or first class.

The aviation industry has called for APD to be suspended after air travel was decimated by the pandemic. Hours before Wednesday's Budget, Michael O'Leary, the Ryanair boss, told the transport select committee that APD was "ridiculous" and "hits the poorest people hardest".

Karen Dee, the chief executive of the Airport Operators' Association, described the rise for long haul flights as "a very damaging blow to an industry already on its knees" and "not a budget for Global Britain".

Budget 2021: Frozen duties
Budget 2021: Frozen duties

Henry Smith, the Tory MP who chairs the all-party Future of Aviation group, said he was disappointed by the increase, adding that it was "not helpful for aviation recovery". He said it was a "curious" decision because long haul flights needed support more than short haul, where there was pent-up demand for holidays.

Figures from the Office for Budget Responsibility (OBR) showed that Treasury receipts from APD were slashed by 85 per cent in face of the collapse in flights.

Travellers face continued uncertainty as the Government's global travel taskforce looks at ways to lift the ban on non-essential travel from May 17 in time for foreign summer holidays.

The UK and EU are looking to unlock travel through the use of vaccination certificates and pre-departure testing, but the OBR warned that aviation faced continued "significant disruption" into 2021-22 in the face of travel restrictions and the threat from new Covid variants.

Travellers returning to the UK from 33 "red list" countries currently face hotel quarantine and have to pay for three Covid tests, while those from other countries have to self-isolate at home for 10 days and undergo three tests.

The OBR predicted that air travel was unlikely to return to a post-Covid "new normal" until 2024-25.

Rory Boland, the editor of Which? Travel magazine, said that given the state of the industry it was "an odd time" to increase the cost of flying.

"From testing costs to airports and agents on the brink of failure, there are a number of more pressing matters in travel that are on the Government's plate," he said.

John Holland-Kaye, the Heathrow chief executive, said: "The Chancellor talks about protecting jobs and livelihoods, fixing the public finances and laying the foundations for the future economy, and yet he continues to ignore the UK's aviation sector.

"He clearly doesn't understand that all three depend on a strong aviation sector delivering the trade, tourism and investment that power vast parts of the British economy. Failing to even mention aviation, let alone provide full business rates relief for airports in today's Budget, is a missed opportunity to ensure the sector can play a key role in the country's economic recovery.

"The absence of any meaningful support from the Government in the face of tough restrictions which have ground travel to a halt will weaken the sector and limit UK growth at the time it is needed most."

Brian Strutton, the general secretary of pilots' union Balpa, said he was "utterly dismayed" that Mr Sunak can "ignore this industry, which is clearly going to be the last to recover from Covid".